South African bonds were weaker on Wednesday morning after US Federal Reserve chairwoman Janet Yellen reiterated her views on interest rates. Yellen, who was speaking in London, told Dow Jones Newswires that interest rates would rise gradually to levels below recent historical norms and that she planned to shrink the Fed’s $4.5-trillion balance sheet. Rand Merchant Bank (RMB) analyst John Cairns said Yellen’s speech failed to inspire any further confidence in the greenback, which remained on the back foot. An increase in US interest rates could make local bonds less attractive to foreign investors. Standard Bank trader Warrick Butler said the benchmark bond R186 had broken through a minor trend support level and moved above 8.58%, which could lead to a larger sell-off back to the 200-day moving average of 8.73%. At 9.02am the R186 was bid at 8.645% from Tuesday’s 8.58% and the R207 at 7.565% from 7.515%. US 10-year treasuries were bid at 2.2307% from 2.1389%. The rand was at R13.012...
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